Index Continues to Rally on Hope

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Underneath, I would anticipate that the 4000 level could be a very interesting area to say the least.

The S&P 500 Index has rallied again during the trading session on Thursday as we continue to see a line of noisy behavior. That being said, the market is likely to continue reaching a high above that the 4200 level. The 4200 level is an area that I think you would need to pay close attention to, as therefore if the market were to break above there, then I think you could talk about a significant change.

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It’s probably worth noting that the market has a lot of noise between here and there, and we are heading into the weekend. That being said, the market continues to move higher based on the idea of the Federal Reserve stepping away from tightening due to the massive disappointment with GDP. Because of this, the market is likely to continue seeing a lot of noise, due to the fact that people are trying to suss out what the Federal Reserve will do over the longer term. That being said, inflation numbers will continue to be crucial, because traders will continue to try to determine whether or not they get cheap and free money.

We are back to the Federal Reserve being the only thing that matters, and of course, economic numbers have nothing to do with the stock market. After all, we entered a recession in the United States during the session, and you can see that the stock market went straight up in the air to celebrate. This is because the hope is that the Federal Reserve will bail out the markets. Ironically, by rallying it’s likely that the Federal Reserve will not need to bail anyone out. In a sense, it’s a bit self-defeating.

Because of this, I think we probably have a little bit more left of this rally, but given enough time, I do think that the sellers come back in. I think we have a lot of trouble just waiting to happen. With this being the case, it will be interesting to see how we close out during the end of the week on Friday, and it could give us a bit of a “heads-up” as to whether or not we have any real legs to the bigger move. Underneath, I would anticipate that the 4000 level could be a very interesting area to say the least.

S&P 500 chart

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